Board approves 2009 budget

County borrows over $200,000 to balance budget

Posted
Tuesday, December 23, 2008 2:55 pm

By Tim Barnum
Staff writer

ARENAC COUNTY — At the Arenac County Board of Commissioners’ meeting on Dec. 22, the Board approved the county’s operating budget for 2009 at $5,067,843, an amount that required a transfer of $229,645 and change from the county’s tax administration fund to balance with projected revenues.

According to Arenac County Treasurer Dennis Stawowy, the tax administration fund is made up of monies the county uses to pay for delinquent property taxes, and is then replenished when those delinquent taxes are repaid, plus interest and late penalties. If the delinquencies are not repaid with interest and penalties, the properties go up for auction in an attempt to generate revenue and restock the fund.

However, both Stawowy and the Board recognize the precarious situation that is developing from the tax administration fund, since the fund also allots payments to Standish-Sterling Community Schools, townships throughout the county who are owed taxes and the Bay-Arenac Intermediate School District.

“I’m not happy with it,” said Board Chairman Raymond Daniels. “The first of the year we’re going to have to figure out what we have to do in order to cut expenses. … We’re (Commissioners) gonna go to the departments first and see what costs they can cut.”

Stawowy adds the amount taken from tax administration is even greater, since monies had to be used for debt retirement.

“Another $120,000 is going towards bond payments,” he said.

After the more than $350,000 is withdrawn from tax admin, Stawowy says the fund will sit at $1.75 million.

This remainder is lower than expected, as the Board had to borrow more than expected in 2008.

“We thought we’d only have to use $125,000 from tax admin last year, and that figure is going to be close to $300,000 by the time we’re done,” Daniels said.

And according to Stawowy, the $1.75 million remaining may throw a hitch in the county’s regular practices when it comes to property tax foreclosures.

“I needed a million nine ($1.9 million) to buy the delinquencies in May,” he said. “I’m assuming it’s going to be as much or higher.

“This May I may not have enough.”

Unfortunately, Stawowy says, if the tax admin numbers are too low and properties are not bought up at auction (this year nine parcels out of 25 went unsold), debt could grow even higher.

“Then we go to the bank and get a loan to pay the school and the local units off,” Stawowy said, adding that interest would accumulate if the county had to take this route.

Also, this year during the auctions held to boost the county’s funds and make up for delinquent taxes, the county was unsuccessful in even breaking even.

“We did not make enough to cover the amount owed in taxes for the 25 parcels up for auction,” Stawowy said. “We had to use money that was left over from the 2007 auction.”

There is a couple ways to save money in the tax administration fund, Stawowy says, but neither choice may be appealing to county residents.

“The residents of the county have to decide and tell the board what services they can do without or come to the determination they want all the services we provide and pay for them,” Stawowy said. “There’s a handful of services in the county the we *have to do. There’s programs that we *don’t have to have.”

He added that several county programs dealing with children, needy families and elderly people are among ones not mandated by the state.

Daniels says the board is already considering the option of cutting services.

“We’re going to have to go through and figure out which services are mandated and not mandated by the state. We’re probably going to have to cut some of the non-mandated programs. Those are feel-good services we offer through the county that we just won’t be able to have anymore,” the Board Chairman said. “So some services that are here today, won’t be here in 2012.”

He references 2012 because that’s when Daniels and Stawowy both said they felt tax administration money would run out.

Coincidentally, or perhaps not, 2012 is one year after the state of Michigan plans to resume revenue sharing with Arenac County. But Daniels says the sharing, which was eliminated temporarily in 2004 and replaced with an additional property tax collection, may not be enough to help struggling counties.

He added state revenue sharing was resumed in Tuscola County this year.

“They (Tuscola County) didn’t get nearly as much as they thought they were going to get,” Daniels said.

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